Starting a new pension in your 20’s; is it a priority?
Posted on September 3, 2010 | Leave a Comment
How do you intend to fund your retirement years ? And, how much money will you need to fund your chosen lifestyle once you retire ? If, like most young people , your answer is ‘ I have no idea ‘, then it is the time to start thinking seriously about your pension. Indeed, ask any financial expert and they will tell you that the earlier you save for your retirement, the easier life will be when you do finally retire.
But for many , the pensions can be a perplexing one. Not only do you have to find a good pension appropriate to your needs, but you must also view how much money you will need to pay for everything from living costs to leisure activities . This may seem like a daunting task , but there are web based tools available which can help you to plan for your retirement .
A pension calculator is a great tool for calculating what you will receive f in retirement , based on such information as what you earn, how long you have left to work and what your current nest egg are. By entering this data into a pension calculator, you can then see if what you’re currently saving is adequate, or if it needs to be changed .
But, how much do you need to save each year to accrue a decent sum of money when you retire ? According to a study of people’s attitudes towards pensions , those that do save start at around 30 years of age and invest under £60 each month . Based on the fact they want to retire at 65, and taking into account annual inflation, their pension will see them receiving under £2,200 a year. This falls far short of the This is a big difference to the £24,000 the average person says they would like to receive .
In order to reach £24,000 , and if you start saving at 32, you would need to invest around £1000+ per month. For the average British worker , is totally unrealistic. Therefore, those who understand pensions suggest that by starting to save at the age of 22 years, you could reduce this monthly amount by a third Please note that this is an example and not a real situation. To find out how much you may need to save, use a pension calculator or see independent pension advisor .
However, it is up to you as to how much you want to save and how much you can afford to save. But it is very important to understand early on, what you are likely to receive from personal, private and state pensions, so that you can take steps early on to save for your retirement.
A pension calculator is a great online service for allowing you to estimate how much you can save based on your current contributions , how much you’ve already saved or what you could save in the future, if you changed the amount you put aside each month and so help with provision to secure a good retirement .
Warnings
- The value of an investment can go down as well as up and is therefore not guaranteed. You may not get back the full amount of your investment.
- All pension calculators (including the results above) are based on a number of general assumptions and are therefore presented as an illustration. They are not a promise of your income. This article should not be considered advice. Always seek independent financial advice before changing your financial arrangements.
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